At the core of our sense of self and personal history are emotional memories. Although emotional or stressful experiences tend to be memorable, emotional arousal can also impair various aspects of memory. In recent years, research into arousal and memory has focused on the key role of the amygdala in enhancing perception and memory of emotionally arousing stimuli. But enhanced memory for arousing information is only part of the story-there is also abundant evidence that arousal enhances some aspects of memory while impairing other aspects. The novel arousal-biased competition (ABC) theory tested in this application states that arousal enhances high-priority neural representations but suppresses low-priority neural representations of stimuli. This can account for a broad range of arousal-induced selectivity effects in memory, including findings that initially appear contradictory such as retrograde amnesia vs. enhancement for neutral stimuli preceding arousing stimuli. The proposed studies will test the effect of arousal on low- and high-priority representations and examine how the effects of arousal differ for younger and older adults. Priority will be systematically manipulated both by bottom-up perceptual salience and by top-down goal relevance; studies will examine the nature of age differences in the effects of arousal on short-term memory, long-term memory and memory binding. One key question is whether arousal's enhancement of high priority and suppression of low priority information are two outcomes from the same competitive process, or whether they arise from independent mechanisms. Because older adults show a deficit in suppression, their performance will help address this question. Although the focus of the application is emotional memory, we are likely to learn about the basic mechanisms of enhancement vs. suppression in aging. Despite a long history of findings that older adults show inhibitory deficits, there have been only a few studies examining the neural mechanisms of older adults' impaired suppression. Our studies examine whether their suppression deficits are greater when stimuli priority is determined by top-down goals or by bottom-up salience and how suppression deficits affect long-term memory.